Date: Sun, 5 Nov 2006 10:42:04 +0000

From: Robert Stevens

Subject: Defamation and compensation for enrichment

Michael,

This is a point which you have made twice and as it has not attracted a response, I'll give one.

The whole question is whether or not the only remedial response available is one which seeks to make good the claimant's loss/damage. If we start from the assumption that the law is, and is only, concerned to make good the claimant's loss, broadly defined so as to include intangible interests such as our interest in our good name, then of course making an award measured by the defendant's gain is wholly arbitrary. There is, of course, no necessary correlation between the size of the defendant's factual gain from the wrong and the claimant's loss, however broadly defined. Nobody, so far, has claimed that there is.

Again, if you thought that the award has to be justified as a punishment for the defendant's dreadful behaviour, or to deter others from committing the wrong, I can well see that a gain based response is, at best, a blunt tool for achieving these ends. However, Alan Beever in his initial post was not claiming that this was the reason for the courts adopting such a remedial response.

The question which needs to be resolved is whether (i) as a matter of principle or (ii) as a matter of law, your initial assumption is correct. That is what everyone else is arguing about. For some wrongs/torts it clearly is not right, and the issue is whether in relation to defamation a remedial response which does not have as its purpose the making good of the claimant's loss, however defined, is available.

I am not here siding with, or opposing, those who claim that a gain based award should be available.

Robert Stevens

Marten Schultz writes:

Measuring the damage to my reputation (or my dignity in the non-consensual boxing match) by reference to the defendant's profits is equally arbitrary, if not more so. What if the defendant is a bad businessman, and makes a loss? My damage does not necessarily change with the business skills of the defendant.

 

All the best,
Michael

--------------------------------------

This has been a very interesting discussion. I have learned a lot and thank all of you for your valuable comments.

On the more theoretical aspect of this, I do not have much to add, but on a practical level I think Michael has a point. The conclusion I draw from this is that in cases such as defamation (at least when there is a commercial interest behind it), it seems reasonable to 1) award the victim restitutionary damages on the basis of the tortfeasor's gain, and 2) also award compensatory damage for the victim's suffering. (All these terms, I think of these issues from the perspective of the Swedish terminology, are quite difficult to translate into English without distortion - maybe I come across sounding weird.) This seems intuitively fair, at least to me, since it entails that the harm to the victim's honor/dignity will always be compensated, and, in addition, the restitutionary damages entails that the tortfeasor will not be able to profit from her wrong. I guess that in some jurisdictions this second step may seem like something that would fall outside of tort law and rather within a law of unjust enrichment. In Sweden we often deal with matters of unjust(-ified) enrichment within tort law and since we're intellectually lazy/pragmatic, we do not generally see the distinction as important.

As for analogies, in Scandinavian law the closest comparisons would be with intellectual property law, I think. Strangely, Swedish law deals with some of these problems under a special statute which deals only with the use of a person's picture or name in advertising, and this statute is quite detached from the protection of dignity that tort law provides.

Lastly, the relationship between punitive damages and restitutionary damages. This is a very interesting topic also from my own background. Swedish law does not generally acknowledge punitive damages, but there are some explicit exceptions (mainly labor law). Depending on your point of view one could find de facto punitive damages also in other contexts (maybe in violent crimes, such as murder and rape). Also, in recent legislation (with its background in a European directive), most importantly a new act regarding discrimination, it has explicitly been stated in the travaux preparatoires that damages are to be punitive. Still, the Supreme Court has been reluctant to accept this (in itself an interesting thing since the Swedish courts are considered extremely loyal to the legislator). In the first decision under the legislation from this spring (two homosexual women were thrown out of restaurant for kissing), the amount of damages was very low. This might, again, speak against the picture that punitive damages play any role here, but I think it does and I think it should. If that is the case compensation for unjust enrichment could as a matter of classification perhaps be dealt with under the heading of "punitive damages". even if I would prefer it to be more explicit. Perhaps this latter approach is the way to go in Sweden in the case of defamation. There is a basis for this approach in this great case we have from the early nineties. A pornographic magazine published a collage consisting of various celebrities - including the prime minister and schlager - Diva Carola - engaged in (some rather extreme) sexual activities. The magazine wrote, under the pictures, "WARNING: SATIRE", but that did not help, the publisher was convicted of the crime of defamation. As for damages, the Supreme Court stated that the assessment should take into account functions of punishment and deterrence, which was something completely new and presumably very important for Sweden but also, characteristically, nothing anyone really made any fuzz about. An interpretation by a leading authority on this has said that the Court should be seen as an expression of a "one should not profit from a wrong" kind of argument.

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